Husk Power Systems

Problems of electrification in rural IndiaIntroduction to Husk Power systems

Success so far

Working Design

Business model & Revenue models

Financing

Economic sustainability

Value chain

Social & economic Impact

CRS activities

Future plans

Agenda

Shortfall in generation capacity & limited electrical infrastructure access

45% of the households in rural India has to depend on biomass fuel or kerosene lanterns

Low priority to villages during Grid Rationing.

Not much success of government plans which focus on rural electrification

Rise in concerns about depleting non renewable energy sources, and elevated environmental concerns.

World Bank-“Distributed generation and supply franchises” model

Problems of electrification in rural India

HUSK POWER SYSTEMS

Gyanesh Pandey Ratnesh Yadav

Inspiration• Pathetic situation

of electricity services in rural Bihar.

• Started off by exploring the various methods

Solar Too Expensive

WindBihar did not

experience high levels of

wind

HydroThere wasn’t enough water for harnessing

Rice husk was deemed unfit for cattle fodder because of the high content of silica in it.

Rice husk could be converted into a combustible gas which could then be used to generate electricity using a generator.

Rice Husk

• Succeeded in installing the technology

• Electrifying the village of Tamkuha in August 2007

Earlier “Samta Samriddhi

Foundation”

• 84 plants with an installed capacity of 25.6 MW

• Supplying electricity to around 40000 rural households across 300 villages.

Current Operations • Earned about $ 540500

of revenue in the financial year 2012-13

• A low cost pay-for-use service approach for its rural customers

Present situation

Success so far..

Working Design

Ele

ctri

city

Pro

duct

ionOccurs in 3

phasesEach phase producing around 230 volts

Dis

trib

uti

on Only single

phase linesTransformers not Used

Exte

nsi

on o

f gri

d About up to 1.5 kmsEnsures a supply of 190 voltsBamboo poles and low voltage wires

Electricity Production & Distribution

Business model

Build, own, operate,

maintain

•Operator, husk loader, collector and electrician•Monthly subscriber fees•4 months for a single month to have operational profits•Around three or four years to recover the capital expenditure

Build, ow

n and

maintain

•Operated by a local who is willing to invest around 10 per cent of the project cost for a share in the revenue

Build and

maintain

•Franchisee model

•sells it to a local entrepreneur

•New owner is responsible for all costs incurred

•Gets to collect to entire revenue

Revenue model

Corporate Finance

• Grants and investment by their owners• Struggling to sustain its franchisee approach because of the unwillingness of banks to take risks• Shell Foundation, LGT Philanthropy, International Finance Corporation , Acumen Fund, Draper Fisher Jurveston, CISCO and Bamboo

Finance, Overseas Private Investment Corporation

Subsidies-MNRE pays a subsidy of up to $14500 for each 32 KW plant installed by HPS

Carbon Payments -contribute around 5 per cent of the revenues and it is estimated to account for about 50 per cent of the total sales by the end of 2014

Financing

Total landed cost of installation = $1300 per kW Unit cost to the end user = average $0.25 per kWh Operational Costs: • Average monthly biomass feedstock = $275 • Average monthly cost of labour = $380 • Average monthly maintenance expenses = $100 Average monthly revenue per plant: • Average monthly electricity sales = $1200 • Average monthly carbon credit = 215 CER • Additional sales = 6 tonnes of incense sticks Sustainability: • At plant level, gross margin = 20 per cent • Takes around 3 months to have operational profits • Takes around three or four years to recover capital expenditure on the

plant Expected lifetimes are as follow: • Gasifier : 12 years • Engine : 20 years • Bamboo poles : 1 year

Economic sustainability

• Rice husks @ $0.03 per kgRaw materials• Unique gasifier design which can be fabricated locally• Low cost monitoring• Bamboo poles based distribution system

R&D & Innovation

• Biomass burnt in a restricted supply of air• Passed through a series of filters • enough to power about 500 households

Operations

• Word of mouthMarketing• request of village representatives and if 400 or more households agree to

pay the monthly electricity fee • only if there was a reliable source of rice husks

Plant Installation Process

• smart meters • Electricians doubled up as collectors Billing and Payments

• Maintaining about 93% availability • Daily monitoring via individual plant managers who sends daily reports

to their regional managersMaintenance

Value Chain

Electricity has played vital role in increasing the working

hour of the village life and thus has helped to improve the quality of life by providing the opportunity of extra earnings

Professions like basket weaving and garment making have also profited because of these extra hours of lighting available to them.

Lighting can remove the danger of poisonous reptiles and insects by removing the darkness in the village area.

The light has improved the future of the students in the village area because light is necessary for education

Ability to now charge their mobile phones in their own houses

Decrease in pollution

Social Impact

Kerosene use has reduced by about 6 to 7

litres – around Rs. 250 – per month Rice mills also benefit from HPS, by earning

around $2500-3000 every year by supplying rice husks at a rate of $25 per ton of rice husk

Creates local jobs, providing employment to around 300 villagers, and training them to work in the plants.

Economic Impact

Education Program

mes

•HPS pays the school fees of local communities in the villages in which its plants are located. •This amounts to around Rs. 50 per month per child.

Livelihood Programm

es

•HPS has provided training to a large number of rural women in incense stick production from the ash which is a by-product of the HPS plants

CSR activities

Future Plans

Installing 2014 plants by the end of 2014

Expansion to West Bengal, Tamil Nadu, Assam & Nepal

If able to register its plants under the Clean Development Mechanism, HPS will be earning an extra Rs 1 lakh per annum per plant

Saving around 72,000 tons of carbon dioxide emissions and provide electricity to a million homes

Thanks